Australian CFOs are optimistic about the prospects for the economy, and plan to increase spending and investment activity in response, according to a new survey.
Optimism among Australian finance executives is at the highest level for four years, the results show.
An annual survey from American Express and CFO Research, conducted in April, found that 74% of Australian respondents expect economic expansion in the next 12 months.
A majority of 57% of respondents expect modest economic expansion, while 17% are anticipating substantial expansion – higher than the global average of 12%.
But just 59% expect their own companies to experience significant top-line growth, compared to an global 72%, and only 7% of Australian compared to 17% of total respondents expect substantial increases.
Still, Australian finance executives are more confident that the pace of economic growth will pick up, with 90% expecting an acceleration by the end of the year and nearly three quarters believing it will happen in the second or third quarter.
This compares to the mere 54% of US respondents that expect the rate of expansion to pick up by the end of the year.
Nearly 90% of Australian participants said their companies had been seeing strong cashflow over the past year, with 63% reporting sticking to a cash preservation strategy.
These stockpiles will be put to good use, with 53% stating they were retaining cash so they can easily pursue investment opportunities, and 83% said they were focused on aggressive M&A activities in the next 12 months.
But around three quarters of Australian executives indicated that they will be more careful when pursuing M&As and capital investment due to tough experiences during the recession.
In addition to acquisitions, around eight in ten plan to use cash to expand their capital spending, operating activities and headcount, while 69% aim to pay down debt.
The largest headcount increases will be in operations and production, with nearly half planning to take on more staff in these areas, but sales, IT, R&D and finance and accounting departments are also in for a boost.
More Australian respondents – 59% compared to the global 54% - also plan to invest more heavily in business development activities including sales and marketing.
Internationally, Argentina's respondents are even more confident in the financial outlook than Australians, with a chart-leading 89% expecting economic expansion in the coming year. This was followed by India (87%), Mexico (84%), Germany (83%) and Singapore (81%).